As the FATCA implementation date of 1 July 2014 approaches, both HMRC and the IRS have made a number of announcements. HMRC has clarified its position on trusts as Investment Entities under US FATCA, and the treatment of accounts held by not for profit organisations under UK FATCA. The IRS has released the W8-BEN-E instructions and an updated Qualified Intermediary (QI) Agreement that takes account of FATCA.
US FATCA
HMRC will update its US FATCA guidance notes in August to clarify its position on trusts as Investment Entities. To summarise, if the trust itself is professionally managed, or the trust has appointed a financial institution to manage the financial assets (so the direct holdings of the trust are being professionally managed), the trust will qualify as an Investment Entity. For further information, please click here.
UK FATCA
Under the amended UK FATCA regulations for the Crown Dependencies and Gibraltar, there will be no obligation to report on the Controlling Persons of a Non-Financial Foreign Entity that meets certain conditions to be a not for profit organisation.
Any UK Financial Institutions which have already put in place systems or processes to identify these Controlling Persons will not be required to report on those persons. Further information is available on the HMRC website.
Qualified Intermediary (QI) Agreement
The IRS has released an updated Qualified Intermediary (QI) agreement to reflect the impact of FATCA which updates and supersedes the QI Agreement that was originally released in 2000. The link to the updated agreement is online here. Further information on the changes from the existing regime will be available in due course.
Form W-8BEN-E Instructions
Instructions on how to complete the new Form W-8BEN-E were released by the IRS on 25 June and are available here.
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